Marketing » MonaVie claims its compensation blueprint was copied.
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MonaVie, the highly successful purveyor of nutritional fruit drinks, is suing Zrii, alleging the competitor ripped off its copyrighted plan for compensating independent distributors.
Both companies are multilevel marketers. They compete for distributors who are compensated in part on sales to new distributors they recruit into the company. Compensation plans are important parts of multilevel marketers' ability to attract distributors because they determine the way monies are paid out.
In the lawsuit, MonaVie said the Zrii pay plan has "nearly identical arrangement, coordination and special layout of the titles, paragraphs and sections, highlighted examples, notes and graphic depictions."
"They lifted specific provisions of our plan word for word in many cases," Graden Jackson, attorney for MonaVie, said Friday.
Mary Anne Wood, the attorney for Zrii, said the company denied that it copied MonaVie's plan.
"We don't think there's been any copyright infringement," she said.
The lawsuit, filed in federal court in Salt Lake City, claims that the similarities are "likely to mislead purchasers and consumers into believing that [Zrii's] nutritional and functional energy beverage products and/or business opportunity are somehow affiliated with the MonaVie branded line of beverages, or otherwise approved, sponsored or authorized by MonaVie."
Jackson said some of the company's distributors made the company aware of the similarities of the plans. The likeness was causing confusion among current and potential distributors, he said.
"When distributors contact us and say, 'Hey Zrii has this identical pay plan. Is Zrii a subsidiary of MonaVie or is it part of MonaVie?' -- that is evidence of confusion."
MonaVie is seeking a preliminary and permanent injunction preventing Zrii from continuing to use the plan. It also wants a judge to order that all copies of the Zrii plan be impounded and destroyed, and it seeks a full accounting of profits.
In addition, MonaVie wants Zrii to pay for damages caused by the alleged copyright violation, with the amount to be determined at trial, as well as attorney and other fees.
MonaVie, of West Jordan, makes drinks based on the açai berry from the Amazon forests of Brazil. The drinks from Zrii, of Draper, are based on the amalaki berry from the foot of the Himalayan mountains in India.
MonaVie was launched in 2005 and says its cumulative sales topped $2.1 billion. Zrii was started in 2007, but has struggled since its top managers quit in February of 2009 in a dispute with owner William F. Farley.
Both companies are privately held so financial information is not publicly available.